Drillsearch Increases Takeover Bid for Ambassador
Drillsearch Energy has announced an increased offer to acquire all of the ordinary shares in Ambassador Oil and Gas.
As per the new offer Drillsearch has offered one share per 5.4 Ambassador shares plus 5 cents cash per Ambassador share.
“We believe our scrip and cash offer for Ambassador is compelling compared to Magnum Hunter’s competing offer as it represents a premium to that offer and provides Ambassador shareholders with the opportunity to hold shares in Drillsearch. The competing Magnum Hunter offer would result in Ambassador shareholders owning New York Stock Exchange listed shares and as such would be subject to a different regulatory regime, have exposure to foreign exchange risk and cross border tax complexities,” Drillsearch Chairman Jim McKerlie said.
Last week Texas based Magnum Hunter announced its intention to make an off-market takeover offer for Ambassador. Magnum’s offer was at a premium to Drillsearch’s first offer made in May.
McKerlie added that Drillsearch, through its sole focus on the Cooper Basin, provides Ambassador’s shareholders with a broader exposure to this major Australian region whereas Magnum Hunter is focused primarily on US shale gas.
“Importantly, Ambassador’s board has recommended that Ambassador shareholders accept the revised Drillsearch offer, in the absence of a superior offer,” he said.
Drillsearch is looking forward to working closely with New Standard Energy and Magnum Hunter who is its 17% shareholder and technical adviser to progress exploration of the highly prospective area of the Patchawarra trough covered by PEL 570, McKerlie said.
Ambassador holds an exploration license in Cooper Basin in Australia. According to Ambassador, PEL 570, situated in the South Australian portion of the Cooper basin, has potential gas in place of up to 20 trillion cubic feet, contained in unconventional rock and coal seams. In PEL 570 Ambassador is fully carried by New Standard Energy for a A$42.5 million exploration program.